Maira and Shreya were partners in a firm. They earned an average profit of ₹ $\displaystyle 2,00,000$ during the last few years. The normal rate of profit in the similar type of business is $\displaystyle 10$%. The value of assets and liabilities of the business were ₹ $\displaystyle 18,00,000$ and ₹ $\displaystyle 3,00,000$ respectively. Calculate the value of goodwill of the firm by super profit method if it is valued at $\displaystyle 3$ years purchase of super profit.

Average Profits = ₹$\displaystyle 2,00,000$ Capital Employed = Total Assets – Outside Liabilities = ₹$\displaystyle 18,00,000$ – ₹$\displaystyle 3,00,000$ = ₹$\displaystyle 15,00,000$ ………………………………………… ½ Normal Profits= Normal rate of return x Capital Employed $\displaystyle 100$ = $\displaystyle 10$/$\displaystyle 100$ x ₹$\displaystyle 15,00,000$ = ₹$\displaystyle 1,50,000$…………………………………………..…… ½ . Super Profits = Average Profits – Normal Profits = ₹$\displaystyle 2,00,000$ - ₹$\displaystyle 1,50,000$ = ₹$\displaystyle 50,000$………………………………………………….1 Goodwill = Super Profits x Number of years purchase Goodwill = ₹$\displaystyle 50,000$ x $\displaystyle 3$ = ₹$\displaystyle 1,50,000$…………………………………………………….. $\displaystyle 1$